Despite struggles, board has taken no decisive action to try to promote change

Reportedly, Canada's Research in Motion, Ltd. (TSE:RIM)'s co-CEOs/Chairman have ensorcelled their company's board members to the point where they've become almost unable to speak up against the pair. As a result the board has remained silent and submissive, even as RIM has seen its financial fortunes slide perilously in the wrong direction.

I. A Need For Change

The Wall Street Journal, though, is reporting that some of the company's biggest investors have quietly joined calls for the board of directors to take drastic action -- either to sell the company or to wipe the management slate clean.

So far the noisiest public complaints had come from Jaguar Financial Corp., a Toronto merchant bank who invested in RIM in hopes of forcing either a sale or a turnaround via a change in management.

Over the course of the last several months, RIM's efforts have unfolded like a train wreck:

Oct. 21
News arrives that RIM has been sued for scooping the name from an American software company's trademarked and active product.

Nov. 25
At the debut of the BlackBerry Bold 9790, RIM's employees offer a 50 percent discount to the first 1,000 customers in Jakarta, Indonesia, provoking a riot. Many are injured and RIM employees are arrested.

Nov. 28Inebriated RIM employees, representing their company on business, start a physical fight with flight attendants, forcing the flight to be diverted to Vancouver, off its course to Beijing. RIM apologies and fires the pair.

Dec. 23
Canada's The Globe and Mail reports that RIM is preparing for a Jan. 11 hearing over whether it stole the trademarked acronym BBM from a Canadian broadcast advocacy who used the term for six decades.

RIM's stock has plummeted in price since the start of 2011. [Image Source: Google Finance]

About the lone positive news over this period has been the minor pickup in the company's stock on Dec. 21, which came thanks to reports that multiple companies were investigating a RIM acquisition.

II. RIM's Management Has Tightly Controlled Company, Board

Currently RIM has a very unusual executive management structure, which some blame for its problems. Company co-founders Jim Balsillie and Mike Lazaridis share the CEO and Chairman position, refusing to allow fresh blood to step in. Of the pair, Mr. Balsillie tends to focus on finances, while Mr. Lazaridis focuses on engineering.

In June RIM agreed to review its management structure, but there's been no action from the company's board thus far. A final analysis, reportedly, may arrive next month, potentially prompting some sort of action.

Investors are focusing their efforts on RIM's contingent of independent directors. These members mostly arrived in the wake of a 2007 stock backdating scandal, which led to fines and penalties from the Ontario Securities Commission and the U.S. Securities and Exchange Commission. At the time the fresh blood forced company co-founder Jim Balsillie to step down from the role of Chairman, hoping to subsequently push co-founder Mike Lazaridis out of the CEO spot. Instead, after a year Jim Balsillie was back as a chairman and Mr. Lazaridis and Balsillie's unusual joint CEO/chairman scheme was restored.

Leading the coalition of independent directors is Barbara Stymest, former Toronto Stock Exchange CEO and executive at the Royal Bank of Canada (TSE:RY), the nation's top lender. Another prominent director is Roger Martin dean of the University of Toronto's and author of a popular book on how directors should take lessons from the NFL, acting in a greater corporate activist capacity.

Mr. Martin wrote in his book, "[Board members] can choose to accept a check-the-box meeting, or they can rise above it and focus on doing their important public-service job: helping their company to perform well."

Ironically both Mr. Martin and Ms. Stymest appear to have given RIM's struggling leadership a check-the-box sort of approval. Reportedly, Mr. Balsillie's control over the board is particularly powerful and he has blocked other top-level executives from getting access to the board, in an effort to consolidate his and Mr. Lazardis' power.

But how long the pair will remain silent and submissive remains to be seen considering that the negativity surrounding RIM is starting to rub off on their reputations. The WSJ quotes an executive at one of RIM’s top investors, "It would seem to be a joke to have two people on the board who claim to be experts in corporate governance."

You commented on how rumours sometimes become true. The subject matter is RIM's board taking steps to boot Balsilie and Lazardis, not the generality of rumours and how sometimes they are true and sometimes not. It's fine, I know you are at the point where you arent willing to admit how wrong you were. I'll just wait until they do boot them, officially.

In fact the subject matter OFFICIALLY is a board review, will it result in booting them both, or one of them, or none of them - it's up to debate and specualtion, but only if you are not an anti-RIM troll.

Otherwise it's of course not up to debate, which you are a living example of.